Pioneer Press, St Paul’s Fiscal Hawks Get it Backwards on 8-80 Investments

I like the Pioneer Press. They do a lot of good work, and I’ve read  a lot of quality articles there over the years. But over the last month or so, a narrative keeps popping up about cost over-runs for infrastructure projects. Mirroring the “fiscal hawk” critique at city hall, they tend to frame infrastructure news in ways that blame high costs on bike and walk projects.

The narrative pits the biking and walking future of Saint Paul against the city’s economic stability, but that’s the wrong story to tell. Instead, quality sidewalks and bike paths are just about the best investments that a city can make.

The Stories So Far

Lately there’s been a bunch of bad news for Saint Paul’s budget, as street projects keep going over budget, sometimes by quite a lot.

The most egregious example was last month’s news that the Jackson Street reconstruction project in downtown Saint Paul was going to be twice its originally estimated cost. The city is using the reconstruction as an opportunity to build the first part of the Capital City Bikeway, an innovative protected bike infrastructure that would finally connect the networks around downtown into a cohesive whole.

When the news came out, though, the Pioneer Press reported it as it if was the result of the bike and sidewalk improvements planned for the street.

Here are the first four paragraphs of the article, the frame of the piece:

A road rebuild that includes the first leg of a downtown bicycle loop is getting off to a pricey start: cost estimates for the full reconstruction of Jackson Street have doubled from $8.45 million to $16.5 million.

The cost increase is sending budget ripple effects through other public works projects that will need to be revised. The Jackson Street rebuild — which stretches little more than a half-mile from Shepard Road to 11th Street — was among several items that were bundled together in 2014 under the title “8-80 Vitality Projects.”

The general goal at the time was to create a more pedestrian-friendly city accessible to anyone age 8 to age 80 through new amenities, including off-street bike paths and pedestrian improvements.

Making St. Paul an “8-80 city” has proven pricier than expected.

[story continues with quotes and details]

The narrative is clear, and echoes stories and columns appearing elsewhere, some of which were written by Joe Soucheray. This frame strongly suggests that bike and pedestrian infrastructure is costing the city lots of money.

In the paper’s defense, reporter Fred Melo later wrote a “correction” article clarifying the non-bike loop related reasons for the rising costs. (Clarification articles typically receive only a fraction of the attention of the original dramatic statements.)

It’s worth mentioning that this narrative isn’t the newspaper’s invention. It reflects an existing Saint Paul sentiment, and not just the people who shout “bicyclists don’t pay taxes” at public meetings. In particular, the two East Side council members, along with groups like “Saint Paul Strong“, have linked biking and walking infrastructure with the argument that the city is not being judicious and transparent with its tax dollars and civic spending.

On its surface, this story might seem like common sense. But in my opinion, it’s a narrative that gets backwards the relationship between city finances and 8-80 infrastructure.

Why are street costs so high?

Jackson Street, in the article above, was the most recent example of larger-than-expected street costs associated with a bicycling / sidewalk project, but it wasn’t the only one. Back in 2014, the bike boulevard projects on Griggs and Jefferson went over budget, and the city had to find $900K to fill in the concrete gaps. Likewise, at the Wheelock Parkway public hearing last month (which I attended), many of the testifiers linked the high assessments with the bike path and sidewalks. And in the most recent example, ostensibly “free” Cleveland Avenue bike lane recently approved by the City Council, came with hundreds of thousands of dollars in added costs. 

But each of these examples is different. Wheelock property owners were not assessed for sidewalks, and the vast majority of its costs were the street reconstruction. In fact, narrowing the lanes may have saved actual street costs compared to the status quo. Costs for the Cleveland bike lane could have been negligible if it had been done during the mill-and-overlay process. Its costs — an extra six months of community process and parking mitigation measures — illustrate the high cost of free parking more than anything else.

By contrast, the connection between the bike boulevards and high costs might have a bit more merit. For years, I’ve been asking different people why bids for bike/walk projects seem to come in over expectations. Part of the problem is the way that construction contracts are framed. Bike walk projects are more likely to be piecemeal affairs, involving a bumpout here or a traffic circle there, and so contractors have to divide their attention over a broader geographic area. In addition, because they’re newer styles of projects, fewer contractors have a great deal experience with 21st century 8-80 infrastructure, which might make them less likely to bid.

(On the other hand, it lasts longer because people weigh much less when they’re not sitting inside 3,000 lb cars.)

In general, the large majority of rising costs have little to do with 8-80 investments, and especially when a city is doing a complete street reconstruction, costs for this kind of infrastructure often seem like a rounding error.

The Jackson Street project is a good example. Few of the extra expenses are due to the new downtown bicycle and pedestrian connection, which includes sidewalks, a curb separated bike lane, and a host of other features like permeable pavers, signage, and street furniture.

But even with all those bells and whistles, the magic doubling price tag isn’t really related to the city’s ambitious 8-80 goals. At a recent meeting, I asked the engineer in charge of the project for a detailed explanation for the rise. Here’s what he said, in order of size:

• $5.5M for water main and sewer upgrades, some of which are a century old.
• 30% because of inflation and rising construction costs since ’12, the last time the city reconstructed a downtown street (4th Street).
• Between $1 and 2M to replace all the 1960s era traffic signals.

If you take the city engineers at their word, and I do, that’s pretty much the whole deal right there. You could argue that the new signals are related to the new needs of the extra bike infrastructure, but you could also argue that 50+ year old stoplights need to be replaced anyway.

What’s the ROI on a bike/ped project?

The questions raised by the city’s fiscal hawks are good ones, but in my opinion they’re choosing the wrong target by focusing on bike and pedestrian infrastructure, especially in downtown. On the contrary, for a city like Saint Paul, these are some of the best investments we can make.

It all has to do with the return on investment for different types and geographies of public spending. This is something that the people in the Strong Towns movement have been working on for years, and I think the recent downtown fiscal debate is a good example of it.

Strong Towns takes a a fiscally conservative approach to thinking about urban design, and one of their most compelling arguments is when they use data to analyze the broad costs and benefits of urban infrastructure. They ask the question “does an investment generate long-term value?” and come to some intriguing answers.

Here’s an example: ROI maps made by Joe Minicozzi, who is an urban economics consultant from North Carolina (and a frequent collaborator with Chuck Marohn and Strong Towns). Minicozzi makes maps that show property tax base first on a general property value map, and then on a per-acre map. The difference is striking.

For example, here’s his analysis of Des Moines, Iowa, a city about 3/5 the population of Saint Paul:

And here’s that same per-acre map shown at an angle, to emphasize the scale of disparity between downtown and the rest of the city:

[See the full explanation of the analysis here.]

These data clearly show how walkable density is good for the city’s bottom line. On a per acre basis, a 4+ story building is going to be far more lucrative for the Saint Paul tax base than a single family home, by orders of magnitude, in fact. This is why Minicozzi calls downtowns the “cash cow” of any city’s property tax base.

In other words, there’s a strong fiscal connection between walkable streets and economic stability. Infrastructure changes that accentuate density, like walkable streets and bike networks, lead to fine-grained mixed-use development. And the more people living and working downtown, the higher the property values and tax receipts, and the greater the economics of agglomeration. It’s a virtuous cycle.

By contrast, building streets that accentuate automobile speed and parking inherently erodes urban agglomeration benefits. They use a lot of land and spread everything out, while simultaneously making it easier to access suburban and exurban competition for development.

Put simply, the long-term infrastructure costs for a city like Saint Paul or Des Moines aren’t going to rise or fall very much. Give or take a few small projects, we’ve built all the streets and sewers we’re going to build. The only question is how many people are going to pay to maintain all of it. The fewer parking lots, the more people we have, the lower the per capita costs.

Backwards Thinking about Infrastructure and Investment

Infrastructure is a tricky thing because it’s so long-term. Here are the first three paragraphs from a recent blog article from the Star Tribune’s Steve Brandt about automobile-related street maintenance costs:

The pavement of Minneapolis residential streets is declining quickly enough that if more money isn’t spent within 10 years, many roads will need expensive reconstruction rather than a much cheaper resurfacing, city public works officials said Tuesday.

It would take a new investment of $30 million annually over the next 10 years to offset the deterioration of an aging network of residential streets largely built in the 1960s and 1970s, Public Works Director Steve Kotke told City Council members at a meeting Tuesday. But even a lesser sum would help, he added.

The outlook has ramifications for city property owners because typically about one-quarter of the cost of street projects is paid through assessments, while the balance is paid through property taxes assessed citywide. The city now spends about $25 million annually on street repairs.

The same story is true in Saint Paul, if not more so. The imbalance between street maintenance costs and tax revenues is a problem (see the “terrible twenty”). The city recently cut back on its residential street paving fund (RSVP) in favor of one focused on commercial arterials, but that will mean more dilapidated streets throughout Saint Paul’s neighborhoods for a long time to come.

The city’s “8-80” skeptics, and the Pioneer Press, are drawing the exact opposite conclusions about the city’s street situation.  They’re not just missing the forest for the trees. It’s like if the Lorax had fixated on whether the Onceler’s wagon had right right kind of donkey harness.

Of all the investments that Saint Paul could make, 8-80 projects have the highest return. Most of the time, they’ll pay for themselves over time by catalyzing density and walkability, the very things that fuel the tax base in the first place. At the same time, the more that cities can shift infrastructure away from expensive automobile streets and parking lots, and onto longer-lasting bicycle and pedestrian infrastructure, the more money it saves on general long-term public works costs.

So not only is the story about 8-80 costs eroding Saint Paul’s bottom line incorrect on the specific facts, if you look at the big picture, it gets the economics backwards. If we want to ensure Saint Paul’s fiscal stability, we shouldn’t be backing away from sidewalks and bike lanes, we should be doubling down.

Making an 8-80 city is the only way to save Saint Paul’s bottom line.